Thank you very much, Mr. Chair.
Good morning, gentlemen. Let me introduce our organization first. Canada Pork International is the export market development agency of the Canadian pork industry. We are a joint initiative of the Canadian Pork Council and the Canadian Meat Council. Our membership includes national and provincial hog producers' associations, as well as federally registered pork packing establishments, as well as trading companies.
It should be noted that more than 50% of the pork produced in Canada is being exported, and in spite of the crisis, that should not change over the next few years. Canada is the world's third largest pork exporter, accounting for 20% of the world pork trade, so we are a significant player. In 2008, Canadian pork exports to over 100 countries amounted to more than one million tonnes, and they were worth $2.7 billion.
Our industry is quite proud of the fact that it has been able to achieve an effective market diversification. While more than a decade ago the U.S. market accounted for more than 75% of our total exports, it is now barely 30%, and the U.S. ranks second in value behind Japan. An essential factor for our success has been the opening of new market opportunities, whether through the Uruguay Round, which introduced us to new markets such as South Korea and the Philippines, or regional trade agreements, including the one with Mexico.
We are thankful for being given the opportunity today to express our views on the trade relations between Canada and Colombia.
While population growth is relatively high in Colombia, the per capita income on average has also been increasing, and as is so often the case with developing countries experiencing economic growth, we are witnessing greater expenditures on food, including a rising demand for meat. Given these conditions, Canada has seen increased pork exports to Colombia, more than doubling in quantity over the past ten years, and of particular interest to our quest to achieve greater value-added exports, it has grown by five times its value.
To give you some figures, in 2008 Canadian pork exports to Colombia amounted to 3,570 tonnes, worth $5.1 million. In the first nine months of this year, our exports to Colombia have reached 2,800 tonnes, worth $4.2 million, which is up by 19% in volume and 32% in value over the same period in 2008.
Over the years we were able to get Colombia to recognize our plant inspection and export certification procedures, which means that in practice all Canadian federally registered establishments can export to Colombia. Just one year ago, Canada Pork International hosted an incoming mission of seven major Colombian pork buyers. Last July, in collaboration with the Canadian embassy in Bogota, CPI co-sponsored a technical seminar that attracted most Colombian buyers. Those two activities have allowed Canadian pork exporters to gain a much better understanding of the Colombian pork requirements and to develop the personal relationships required to take advantage of new opportunities in that country—and they are significant.
The conditions of economic growth and improved political stability in Colombia, combined with a good knowledge of the local trading conditions, lead us to believe that Canada can look to continued growth in trade, including pork, if our industry is able to retain favourable terms of access relative to our U.S. competitors. Failure to do so will mean that Canadian pork is very likely to be out of that market for a considerable period of time.
Traditionally, Canada has been the largest foreign pork supplier to the Caribbean, to Central America, and to Colombia. Recently, our trade position has been seriously eroded by a series of free trade agreements concluded with the U.S., to the point that the Americans have now become the largest foreign pork suppliers in Central America and in Colombia.
Colombia's WTO binding tariffs on pork range from 70% to 108%, while the applied tariff rates range from 22% to 30% on some products. The U.S.-Colombia free trade agreement provides for the complete phasing out of tariffs on most key pork products within five years. This would provide a significant advantage to our U.S. competitors for several years.
The Canadian deal with Colombia calls for the phase-out over five years of only the in-quota tariff. It will require another eight years to see the effective elimination of duties above the tariff quota.
While the tariff quota is 5,000 tonnes for the first year--a level that is at least 50% greater than our exports in 2008--and will increase by 3% per year, we see enough opportunity for even greater growth in export volumes that the U.S. will maintain a significant total advantage for several years.
As you are likely aware, the Colombia-U.S. free trade agreement has not yet been implemented, and it remains quite unclear as to when the United States Congress will vote on it. However, from contact our industry has had with U.S. industry officials and policy-makers, it seems that the U.S.-Colombia agreement will be passed and put into effect by the current Congress by 2012. It is therefore very much our hope that Canada will pass into law its own trade liberalization agreement with Colombia as soon as possible so that we get a head start on reducing Colombian import charges on Canadian pork. The sooner we are able to implement our own agreement, the less will be U.S. tariff advantages in both size and duration.
Our industry is currently in a difficult situation and cannot afford to lose any market of significance, such as Colombia. Therefore, Canada Pork International strongly supports the passage of the Canada-Colombia free trade agreement at the earliest opportunity.
Just to take one more minute of the committee's time, we wish to bring to your attention that the European Union and the Republic of Korea just signed a free trade agreement. We expect that this development will revive interest in the United States in implementing the deal they completed with South Korea last year.
South Korea is Canada's fourth largest market for pork exports, and our sales are on track to exceed $130 million this year. We were in Korea less than one month ago. All the Korean agents of the Canadian exporters were unanimous in saying that there are very good opportunities developing for a wide range of products, but mostly for value-added products such as chilled pork. It happens that Canada's two principal competitors in the Korean pork market are the European Union and the United States. Here, again, Canada has a significant interest in not being left behind.
Our South Korean contacts made it very clear that without an agreement with South Korea, the Canadian pork industry would be almost out of that market within two years. Therefore, we urge the committee to support efforts to complete and implement the Canada-South Korea free trade agreement as early as possible.
Thank you for your time. I am available to answer any questions you may have.
